Smartphones Have Made Location-Based Advertising More Sophisticated
Always the mantra of the estate agent, there’s no doubt that location is becoming central to the thinking of marketers responsible for businesses with a ‘bricks and mortar’ presence. The ability to market in a highly targeted way to consumers in the vicinity of one of your shops is a highly attractive one – asking consumers to detour just a few feet to your store rather than to consider a more onerous journey means that marketing spend works harder. Even better if the consumer’s context and intent is understood – if you’re a fashion retailer who knows customers in your vicinity are shopping for clothes, the effectiveness is amplified even further.
Until recently, the only location-based marketing options available were proximity marketing techniques such as bluetooth, which although often highly effective could only be used sparingly for fear of irritating customers.
But the advent of smartphones and the mobile web has changed the landscape. People are now using the web on the move and are becoming increasingly prepared to voluntarily share their location, despite privacy concerns. The key to this change in attitude has been rewarding customers for ‘checking in’ to places, and in this regard Foursquare has led the way.
Foursquare is a location based social game that encourages users to ‘check in’ to various locations by offering them rewards. These may be status titles such as becoming the ‘Mayor’ of a given location, ‘badges’ unlocked by checking in to a place or places a given number of times, the accumulation of points or incentives offered by businesses to ‘check in’ to their locations. What’s in it for the business? Well increased footfall for one thing – Foursquare encourages both competition and socialising. Users competing with each other for ‘Mayorships’ will make more frequent visits to given locations to secure the title, whilst users ‘check ins’ are shared with their contacts not only on Foursquare but on other social networks such as Twitter and Facebook. Hence, friends are encouraged to socialise by being more aware of each others location – and that’s great news for a bricks and mortar business if they decide to socialise in their location.
But although Foursquare has solved the conundrum of enticing users to voluntarily share their locations, it lacks one thing – scale. Despite its rapid growth, its doesn’t yet have critical mass. Add in the complications of diverse user intents and brand preferences,and the simple fact that even it’s most avid users won’t be ‘checking in’ all the time and you have a service with a limited potential commercial opportunity, at least at present.
The problem for Foursquare is that both Facebook and Twitter have the scale that they’re striving for, and both are are making plays in the location-based market. Twitter has already launched Twitter Places, which allows users to attach location information to their tweets. This has 2 future utilities for users – being able to ’search’ by location to see tweets in that vicinity, and ‘promoted tweets’ being inserted into your stream dependent on the location and context of your tweets. Both have potential for advertisers, but rely on Twitter being able to make a compelling case to it’s users as to why they should be attaching location information to their tweets.
Facebook has even more potential for advertisers. The social networking site is fast approaching 500m users and is by far the number 1 destination on the mobile web. And if users can be enticed to share their location then advertisers will have access to a far larger market than either Foursquare or Twitter can muster. Facebook’s Mark Zuckerberg has announced that Facebook is working on location-based services which will be launched soon.
The location-based advertising market is further complicated by the presence of 2 more of the US tech giants – Google and Apple. Google already offers location-based search for mobiles and Apple’s involvement comes from the iAd ‘in app’ advertising platform they launched recently. As many apps are location based (e.g. mapping solutions) they believe location-based advertising will be an important part of the iAd inventory.
So what should luxury brand marketers make of all these emerging opportunities ?
Many of these options will be attractive to mass brands, but for luxury and premium retailers the ‘who’ is just as important as the ‘where’ and marketers won’t want to distribute discount vouchers and offers like confetti just because people have ‘checked in’ to their location or are wandering in the vicinity of their store.
Google mobile search adds value because there’s an understanding of the intent of the consumer. If a customer Google’s ‘Pandora Jewellery’ when they’re out and about, it makes sense to be able to serve them an ad which informs them where their nearest Pandora stockist is.
Facebook also offers a promising vehicle as it offers other information that complements the location of the consumer that allows much more precise targeting – whether that customer is a fan of your brand being the most important.
But the most powerful location based applications for luxury brands might be still to come. Imagine combining CRM with customer and prospect data with the more advanced location technology being developed which can identify a customer’s location, both indoors and out, without them being forced to ‘check in’. The lack of requirement for a ‘check in’ widens the market, and the integration with CRM allows targeting not only of those most likely to buy, but allows offers and incentives to be targeted precisely. Such a service could be the key to unlocking the potential of location for luxury brands – be its not here yet..
For example, Facebook advertising is extremely effective in driving prospects to a retailer’s Facebook page to ’Like’ them rather than trying to direct them straight to the retailer’s website. Due to the ’unobstrusive’ nature of the ad on the prospect’s profile, and because it’s likely to be interrupting them from their main reason for accessing the site, it needs a strong call to action. Hence, advertisers should be enticing users to ‘Like’ a brand in return for some form of benefit – be it access to exclusive content, competition entry or other incentives. ‘Drive to site’ marketing can then commence via users’ newsfeeds once they’ve signed up. Brands such as Burberry and Gap have used this approach to great success.
